Alberta Health Minister Fred Horne’s decision to sack the Alberta Health Services board can easily be justified. If you want to micromanage and make all the decisions, you shouldn’t maintain the pretence of an arm’s-length board as a fig leaf.

Horne chose his battleground well. In one corner, wearing black hats, you have greedy, overpaid, good-for-nothing, fat cat bureaucrats getting “bonuses” when good Albertans are still waiting too long for care and other staff are being laid off. In the other corner, on his white charger and wearing a white hat, is the defender of the people, pursuing the populist cause.

Less colourfully, Horne publicly asked the AHS board not to endorse the “pay at risk” for 100 or so executives.

It’s important to look at what is at stake here. Pay at risk is not a euphemism for automatic pay increases, in contrast to the bonus arrangements I inherited from some of the previous regions where managers normally got at least 90 per cent of the potential bonus because of soft targets. Recognizing the need to improve the health system, we set tougher targets to stretch managers, aiming for an average 50 per cent payment of the potential pay at risk.

We also stopped being a pacesetter for management salaries. We benchmarked salaries against other provinces, including the expected pay at risk amount. This means that, absent pay at risk, Alberta health care executives would be paid at the bottom of the national range, causing potential problems with recruiting and retaining good staff.

But all this is hard to explain in a 30-second sound bite.

The criteria for pay at risk are established at the start of the year, and mine were published on the web. Not once was there any public questioning of those criteria in advance. The criticism of pay at risk was always retrospective. No “bonus” could ever be justified in the eyes of the trolls if there was ever a single problem in the health system.

Importantly, eligibility for pay at risk was incorporated in the legally binding contract signed with every manager.

So what the AHS board was asked to do was unilaterally tear up its contractual agreements with its senior managers, exposing itself to costly legal action for breach of contract. Minister Horne, who put the populist position, is not the person who would be sued. It is no surprise that the board refused to abide by the minister’s request, making the appropriate decision from a governance perspective, regardless of the politics.

Think about it from a board member’s point of view. Would you like to sign a contract with another organization of which they were a board member (or had some other senior role) if you knew their word and signature couldn’t be trusted? No wonder ex-chairman Stephen Lockwood talked about integrity.

Alberta is a democracy and politicians are there to make political decisions. And in Alberta they do so in spades. Should politicians set broad goals, agree on broad targets? My answer is yes. Should they determine pay and conditions for individuals? My answer is no, or at least certainly not two or three levels down the organization chart. So the critical question is what should be the limits of political interference in the health system? And to make this more real, here are two examples from my time at AHS that are in the public domain.

In an example analogous to the current one, Premier Ed Stelmach announced a pay freeze for government employees and AHS was asked to do the same. Effectively we were being asked to tear up collective agreements with nurses, cleaners and therapists. I wrote to and met with the relevant unions and politely asked them to abide by the premier’s whim, and they politely said no. I didn’t pursue it any further and luckily, neither did the premier.

Another example was the outcome of the public tender for cataract services in Edmonton and Calgary. One of the unsuccessful bidders (apparently a donor to the Progressive Conservative party) was not happy with the outcome and agitated for the tender process to be overturned. Following a very public ministerial intervention, the unsuccessful tenderer was appeased, and money was diverted from other services into his pockets. The issue disappeared from the media, an important criterion at the time. Good politics but probably not my finest hour in terms of serving the public interest.

Although having an independent board mitigated the extent of political interference, it didn’t eliminate it. Each instance of political interference involved a rebalancing of decisions away from the broader public interest toward the political, with political sometimes meaning partisan, sometime populist. Neither basis for political interference is good for the long term.

Alberta is at the bottom of the provincial pile in terms of its health system: it is the most expensive in Canada and delivers poor outcomes in terms of life expectancy and other health measures. It needs to change significantly. Change that is slowly happening.

The province has a history of political interference in health-care decision-making and this may provide part of the explanation for the province’s poor positioning. Pandering to short-term populism is a sure way to keep it there.

Stephen Duckett is the former president and CEO of Alberta Health Services

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